Egypt Yields Touch 1-Year High

Yields on Egyptian debt have reached one-year highs in recent weeks on the back of an estimated $4-5 billion exit from the country’s debt market, bankers and economists told Reuters, part of a global selloff in emerging markets. Egypt’s short and long-term debt yields have been climbing since April, with 12-month bills last week hitting their highest levels since July 2017, when they peaked at 21.72%. Yields cooled slightly at an auction on Thursday however, with 12-month yields falling to 19.38% from 19.44% and six-month yields declining to 19.61% from 19.79% at the last similar sale on July 5. Economists and bankers said the higher yields are part of a broad global selloff in emerging markets that has hit Egypt, one of the world’s hottest destinations for portfolio investors last year after short-term yields touched 22%, the result of aggressive central bank rate hikes aimed at curbing inflation. Foreign investment in Egyptian treasuries has surged since Egypt floated its currency in late-2016, climbing from less than $1 billion at the time to over $23 billion at the end of March.